ZAGREB, May 10, 2018 – Prime Minister Andrej Plenković said on Thursday he was absolutely confident that Croatia was prepared to launch the process of conversion to the euro, and underscored that the country would have lasting and multiple benefits from having the euro as the legal tender, while the costs of the changeover would be mainly low and short-term.
“We have reached a relatively high level of meeting the convergence criteria, we have been keeping a low inflation rate and stable exchange rate for two decades. We have got very good results in the field of budget and fiscal consolidation,” the prime minister said at the start of his cabinet’s meeting in Zagreb on Thursday at which a strategy for introducing the euro as the legal tender was on the agenda.
The remaining criterion which still must be satisfied by Croatia is reducing the public debt, he recalled. At the end of last year the public debt to gross domestic product ratio fell to 78%, and is expected to slide down to 65% by 2021, he informed the cabinet. “This clearly shows that the government pursues a responsible economic policy,” Plenković said.
The strategy makes a thorough analysis of economic benefits and costs of the introduction of the euro and gives a description of the activities to be taken during the changeover period.
Plenković underscores that the euro as the sole legal tender would help reduce the risks to financial and macro-economic stability. All that is supposed to contribute to a faster economic growth, improve employment, increase investment and help the financial and economic system to be more resilient to various forms of deviations, he said.
Plenković called for making the public more aware of the importance of this topic. Furthermore, a national council for the euro introduction is to be set up. “The strategy does not specify the target date for the convergence to the euro, however, we know exactly which steps are to be taken,” Plenković said.